Watch your mail for business scams

The Better Business Bureau serving the Canton and Greater West Virginia area offers tips and advice for consumers to avoid fraudulent practices.

Completing official paperwork correctly can be a nerve-wracking part of setting up a new business. New business owners can easily confuse official-looking correspondence with a genuine legal requirement.. Here’s how to spot a scam that makes new business owners pay too much for a useless certificate of existence.

How the scam works

You start a new business and register it as an LLC. Then you receive a letter or email from what appears to be a government agency. The correspondence does not explicitly say it is from the government, but the wording mimics other letters you have received from official sources. The message informs you that you have “one more step to take” before you can obtain your “certificate of existence”. It’s easy. Send the organization a fee ranging from $80 to $120, and they will mail the document to you. Do not fall into the trap ! The letter may state in fine print that the certificate is “optional”, but overall the tone suggests that it is a legal requirement. It’s not. Businesses may wish to obtain a Certificate of Existence under certain circumstances, such as closing a loan. However, this is not a required part of setting up a new business, as the correspondence indicates. If you need a certificate of existence, visit your state’s website (bit.ly/IRSState) and purchase one directly. States charge around $10 for this service.

A new business owner made this BBB Scam Tracker report: “I received a letter in the mail from a fake business [that has been] scamming new LLC business registrations since at least 2019. The envelope I received doesn’t explicitly say it’s a non-governmental agency, and they ask for a payment of $112.50 to send within two weeks. They are fast too. They sent me this the day after I signed up [my new business]. If you read carefully, this indicates that you have one step left to order the purchase of your optional certificate of existence form from the Connecticut Certificate Service.

How to spot this scam

  • Familiarize yourself with the state laws that apply to your business. Check your state government website to find out what business certificates and licenses are required by law, if any.
  • Be aware that new business owners are the target of scams. Stay alert to the possibility of being targeted by a scammer. Don’t take everyone at their word and beware of unsolicited communications. Do your research before paying for services or certificates that someone claims you need to do business.
  • Carefully review payment notices. Scammers sometimes send fake invoices hoping you’ll assume they’re legit and mindlessly pay. Never pay without confirming that an invoice is real.
  • Do not panic. Scammers like to use scare tactics to get people to pay them money. Don’t make a payment just because someone is threatening you or your business. Always make sure the payment request is from an official source before paying.

For more information − If you’ve been scammed, report it to BBB.org/ScamTracker. Your report can help others avoid being scammed.

For information BBB − Visit BBB.org/canton or call 330-454-9401 to find a business, file a complaint, write a customer review, read tips, find our events, follow us on social media, and more!